1. The Revitalization Policy for Depressed Regions in Korea
May 2007
Won Sup Lee
Korea Research Institute for Human Settlements

2. Contents Ⅰ. Introduction Ⅱ. New Policy Paradigm Ⅲ. Strategies
Ⅳ. The Revitalization Program
V. Interim Evaluation and Future Direction

3. I . Introduction

4. Condition of depressed regions
Depopulation from urbanization and industrialization
Area
Population
51.2%
48.8%
Other
regions
Depressed
92.6%
7.7
7.4%

5. Decreasing social vitality due to aging
Population Structure
(인)
80세
60~64세
40~44세
20~24세
0~4세
4,000
2,000
Growing
1973
80세
60~64세
40~44세
20~24세
0~4세
4,000
2,000
(인)
Decreasing
2003
80세
60~64세
40~44세
20~24세
0~4세
4,000
2,000
(인)
2013
Collapsed

6. Other common issues Decaying economic vitality and weak financial
bases of local governments
Weak social capacities due to the lack of
human capital
Low accessibilities to advanced information,
education, health care, culture, etc.
Marginal regions neglected from mainstream
spatial policy
Top down policy led by the central government

7. Changes in policy for depressed regions
Major programs and objective areas
2000s
rural villages
coastal villages
beautiful villages
small towns
border areas
1990s
rural living condition
improvement
development
promotion zones
1980s
Islands
back countries

8. Objective areas of selective programs
Back countries
47.6%
Population
56.4%
Mfg. firms
65.0%
Major universities
70.0%
R&D institutions
85.0%
Government agencies
91.0%
100 Largest corporations
Promotion zones
Border areas
Islands
410 islands
361 areas
31 zones
98 areas

9. Criticism of existing policies
Lack of linkages among programs implemented by
different departments
Dominated by the central government and passive
participation of local regions
Over emphasis on hardware, mainly roads
Low efficiencies due to uncoordinated and
fragmented small scale projects

10. Opportunities for depressed regions
Changes in social value favorable to rural areas
Increased interests in quality of life, environment,
leisure and well-being
High-speed transportation and information network
enabling to overcome accessibility problems
The 40 hours work week system and family oriented
rural tourism pattern
Movement of retired people to rural areas

11. New Policy Paradigm

12. New policy paradigm
Balanced and mutual development of rural and urban region
Vision
Revitalization of depressed region through innovation
Objective
Local governments and private sector
Main actor
Focusing on soft power and industrial fusion
Strategy

13. Policy Framework Innovation Revital Win-Win Industrial Fusion Coexit
Actor
System
Project
ASP
Model
Revital
Win-Win
Rural
Urban
Coexit
Industrial Fusion
Agriculture
Manufacturing.
Service
Fusion

14. Comparison of existing and new policy
Soft power and innovation driven
Development
strategy
Hardware and input driven
Government and private sectors
Major Actor
Central (local) government
Integrated and
horizontal
Relationship
among actors
Disintegrated and
Vertical

15. III . Strategies

16. Utilizing amenity and resources Technology innovation
Establishment of RIS
Learning/Planning
Utilizing amenity and resources
Technology innovation
Industrial fusion
Local Leaders
Universities
R&D Institutions
Rural natives
Businesses

17. Rural-urban interaction
Experience
Tourism
Residence
Amenity
Community
Infrastructure
Experiencing farming, fishing, picking, etc.
Rural (green) tourism
Staying in rural over weekend and vacation

18. Industrial fusion Case 1: Ginseng products Production + Processing
Agriculture
Forestry
Fishery
Processing
Manufacturing
Service
Case 1: Ginseng products
Production + Processing
Case 2: Organic farms
Production + Sales (Tourism)
Case 3: Green tea
Production + Processing + Sales (Tourism)

19. IV . The Revitalization Program

20. Designation of the revitalization areas
Numbers
70 (6 cities, 64 counties)
Lower 30% of local regions
Area
48.8 % of national territory
Population
7.4 % of total population
Tax
revenue
13.4% against basic expenditure
Income tax
2.5% of national total
RA designation are effective for 3 years ( )
after that review the eligibility

21. Financial assistance for RA (mil. $, 2005)
No. of regions
Assistance
per region
Total 70
200
Basic allocation
- Lower 10%
- Middle 10%
- Upper 10% 23 24
3.0
2.5
2.0
175 69 60 46
Planning incentive
- Upper 20%
- Middle 20-50%
Assessment incentive 13 22
0.5
0.3
13.1
6.5
6.6
8.4
Family doctor
0.05
3.5
Each RA receives 12 million US dollars for three years
from the central government, with incentive or disincentive
depending on performance

22. Topics of the revitalization program
Topics of development
No. of regions
Examples
Resource development 35
Various agricultural products
Cultural tourism 12
green tourism, folk culture
Image marketing 7
Happy 700, alpine village
Education 5
Farming experience, language education
Health and life 6
Herb, ginseng
Marine and fishery
Oceanic bio-industry,
blue tourism

23. Implementation process
Planning
Prepared by local governments
Review
Reviewed by advisory committee
Final plan approved by the joint
interdepartmental driving group
Implemen
-tation
Budget allocation by MPB
Implementation by local governments
Assessment
Evaluated by advisory committee
PCBND, MAF and MOGAHA are the main bodies of central
government

24. V . Interim Evaluation and
Future Direction

25. Major accomplishment
Participation of local residents and emergence of leader group enhance possibility of success
Regional innovation network through the formation of forum, education, committee and study group
Finding new sources of growth engine through industrial fusion and collaborative efforts

26. Key success factors Participation and innovation through the ASP model
Participation from the public and private sectors
Consulting and collaboration of experts
Systematic design of industrial development
Utilizing regional characteristics and comparative
advantages for production, processing and marketing
Linkages of existing and new projects
Integrates various government programs to
generate synergy effect

27. Problems and difficulties
Delayed start in few regions during earlier stage
Difficulties in designing the revitalization program
Tendencies to rely on hardware projects
Deficiencies in human capital
Aging population and unstable bureaucracy
Lack of understanding on the new program
Weak monitoring and evaluation system
Evaluation emphasizes budget spending
Weak linkage between performance and incentive

28. Future directions Improving social capacities to lead innovation
Encourage group study, bench marking,
education, and diffusion of success stories
Enhancing capability of local governments to planning, design and implementation
Establishing a group consulting system for technical assistance as alternative to the family doctor system

29. Future directions Managing assessment and incentive system
Set numeric objectives and performance
indicators
Strengthen relationship between
performance and incentives/disincentives
Creating synergy effects of related policies
Revitalization policy linked to rural policies and
community development policies

30. Future directions
Promoting interregional cooperation beyond administrative boundaries
Save money through joint R&D and marketing
Prepare financial incentives for cooperation
Encouraging more participation of people
Private sector should be major project operator
with government providing assistance

31. Preparing 2nd round policy
Selection of the 2nd round RA
Evaluate performance and socio-economic
indicators of the 1st round RA
Drop out and admit a dozen regions
Change in the administration of the policy
MAF, instead of MOGAHA, will take initiative of
the RA program
Expect stronger linkage between the RA program
and rural policies

32. Thank you